Problem

Tax Audits How does the IRS decide on the percentage of income tax returns to audit...

Tax Audits How does the IRS decide on the percentage of income tax returns to audit for each state? Suppose they do it by randomly selecting 50 values from a normal distribution with a mean equal to 1.55% and a standard deviation equal to .45%. (Computer programs are available for this type of sampling.)

a. What is the probability that a particular state will have more than 2.5% of its income tax returns audited?

b. What is the probability that a state will have less than 1% of its income tax returns audited?

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